@Anonymous wrote:
Hello,
I am trying to rebuild my credit. I filed BK7 in 10/10 ...
I currently have about 20,000 worth of installment loans (student loans) on my credit report that I am paying. I have no revolving accounts.
I am going to apply for some secured cards to start having some revolving activity. I was going to do the secured loan at my cu and take that $$ and get a secured credit card, but I wonder if I even should do that, since I have all the student loans. Is it good to have a mix of different types of installment loans or does it all just count as the same thing on FICO scoring? Basically should I do the secured loan and card, or just the secured card(s)? Thanks in advance.
While it is a good idea to have a good mix of credit, IMO, installment accounts are a very tiny part of FICO scoring. If you had other CCs reporting, and if I took a guess to what would happen to your FICO scores if you paid off all of your SLs to $0, I would guess that your FICO scores would barely change...single digits at best. It's such a small deal that adding any new installment accounts (secured or otherwise) to the fray would only lower your scores due to the new credit. I wouldn't do it. Though, the new secured CCs are a great idea and do weigh very heavily on your FICO score. I predict significant gains when the first is added. I'd start with one and then re-evaluate your FICO scores after 6 months. You may not need any more secured cards after that point. You might see gains by adding 1 or 2 more CCs beyond that in the future.
Per mix, I was always told that installments are considered one in the same, so car loans, SLs, personal loans, etc. are all seen by FICO as the same. Though, some have reported gains when adding a mortgage, so that may deflate the theory. I don't know.
